NBN answers critics with construction to finish on time and on budget

Australia’s NBN is a company which has taken its fair share of criticism over the last few years, but it is difficult to argue with the concept as well as the progress which is being made.

Having laid 216,000 km of optical cables, build 27,000 street cabinets and deployed 2,200 fixed-wireless towers across the country, the construction phase of the project is drawing to a close.

“In less than nine months, the major construction component of the NBN network will be complete, on-time and actually on budget,” said NBN CEO Stephen Rue at Broadband World Forum in Amsterdam.

Founded in 2009, the National Broadband Network is a government-funded infrastructure project designed to a deploy nationwide, future-proofed broadband network. Despite being a very logical and worthwhile project, it has attracted considerable criticism both politically and from the media.

Some of the critics will be quietened by Rue’s statement there will be no overrun or overspend, though questions will remain as to whether this was the best way to allocate tax dollars in the first place.

That said, perhaps the answer to this question is the very concept of the initiative in the first place. If private industry was offering the government confidence that connectivity infrastructure would be taken to every corner of the country, the scheme would not have gathered pace in the first place.

And from Rue’s perspective, in a decade this criticism will be completely forgotten. Over the years to come, Australian’s in the less commercially attractive regions of the country will benefit from the infrastructure. Rural locations will be afforded the opportunity to participate in the digital economy, while healthcare and education can also be revolutionised.

This is one of the interesting aspects of Australia as a country. At 7.692 million km², it is the sixth largest country in the world, but with a population of 24.6 million, it is one of the most sparse. Rue pointed to the complications of delivering connectivity across the country when population density is 3 people per km², creating the digital divide which NBN is attempting to bridge.

Some around the world might turn up their noses at the remote healthcare or education usecases which have been championed by the digital enthusiasts, but in a country as vast and sparse as Australia there is genuine potential. However, the network has to be there in the first place.

Many critics of this initiative will point to download speeds which do not match-up with other countries, Ookla ranks Australia as 59th in the world, however Rue has issue with these rankings. According to research which commissioned by NBN, which it claims is a representation of the population on the whole not just those who have access, NBN ranks Australia as having the 17th best connectivity worldwide.

These results have to be taken with a pinch of salt, but perhaps the research will help calm the waves of criticism which are flowing around the country. NBN might be expensive, but in 10 years’ time, Australians will realise this was a very sensible and forward-looking investment.

Perhaps a few other countries will take note, maybe even the US. Although such an initiative conflicts with the capitalist nature of the US, public-funded infrastructure looks like the most realistic means to close the digital divide.

NBN’s journey hasn’t been smooth, but CTO claims its delivering on the promise

At Broadband World Forum one of the most common plays was to poke fun at the NBN troubles in Australia, but CTO Ray Owen’s reckons he’s got the last laugh.

According to Owen, the NBN network now carries 28 petabytes of data every day, with average user consuming 213 GB a month and the top 30% of fibre customers consuming more than a terabyte. Back in April, the team even noted one user managed to consumer more than 23 terabytes during the month. “We’re not too sure what he was actually doing, but he was definitely having a good time,” joked Owen.

The plan is to get 8 million happy homes on the NBN network by 2020, but also a minimum speed of 25 Mbps for all Australian citizens. In terms of penetration, Owen suggested the NBN network now services 4.4 Aussies, 63% of the target, though meeting the 25 Mbps government-mandated target would take more than fibre. A multi-technology mix has been tabled including Fixed Wireless Access (FWA), G.Fast, fibre and satellite to meet these demands. In a country the size of Australia, containing some very hostile environments, 100% fibre penetration is not a realistic goal.

Despite Owen’s claim on progress, it didn’t stop the mocking. Conference chairperson Richard Jones was one to poke fun, in between humble claims of founding 25 different companies over the course of his unassuming career, while Kate McKenzie, CEO of New Zealand wholesale network provider Chorus, revelled in the troubles as evidence of how wonderful she and her business is.

While the poking might have been on the obnoxious side, it isn’t untrue. The NBN rollout has been a painful journey, with the latest revelation coming from the latest budget estimates. CEO Steven Rue told Senate Estimates NBN would still be using the Fibre-to-the-Node (FTTN) approach until at least 2040. The multi-technology mix has been taking stick, but it is the only genuine option to ensure all Australian citizens are taking into the digital economy together. 100% fibre penetration is not going to be a viable option in the foreseeable future. That said, many of the criticisms of NBN do have merit.

Looking forward, NBN forecasts increased adoption of 4K and 8K video, smart home adoption will increase rapidly and augmented reality will start to make an impact over the next couple of years, while the business segment will continue to diversify. Real-time entertainment services are quickly declining, VPN uptake is on the up and file sharing is heading south. This will not only impact the technology which will be used to facilitate connectivity, but the approach to experience. As you can see from the picture below, the plans have been laid to evolve the network beyond the 2020 deadline.

“What I’m interested in as a CTO is the different technologies which can help improve this customer experience,” said Owen.

Beyond 2020, perhaps the full fibre (FTTP) vision will be revived. The current technology mix is best case scenario to meet demands, but it is by no means perfect or particularly future-proofed.

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Telstra profits plunge thanks in part to NBN overheads

Australian operator group Telstra saw its annual profits fall by 9% thanks, at least in part, to the costs incurred in the rollout of NBN.

State-run telecoms wholesaler NBN has apparently started charging operators more to use its network, which at least provides them with a handy scapegoat when the numbers go in the wrong direction. To be fair to Telstra revenues were up 3% for the 2018 financial year so clearly overheads took a sharp turn for the worse.

“We have seen strong subscriber growth, particularly in the second half of the year, adding 342,000 retail mobile customers, 88,000 retail fixed broadband customers and 135,000 retail bundles during FY18,” said Telstra CEO Andrew Penn. “Despite this, the challenging trading conditions are expected to continue in FY19, including ongoing pressure on ARPU and further negative impact of the NBN network rollout on our underlying earnings.”

Penn was keen to stress how much of this increased overhead is also down to investment, inevitably playing the 5G card to illustrate his point. “Yesterday we announced we had switched on 5G technology across selected areas of the Gold Coast, making us the first in the country to be 5G ready, and we expect to have more than 200 5G-capable sites live

around the country by the end of 2018.”

Here are some slides from the investor presentation and you can read further analysis of these numbers at Light Reading here.

Telstra 2018 1

Telstra 2018 2

Telstra 2018 3

Telstra 2018 4

Telstra 2018 5

NBN legitimises G.fast by adding it to the Aussie mix

Australian public broadband initiative NBN has announced it will be incorporating G.fast into its technology mix from next year.

This marks a significant endorsement of the much-maligned technology by a major infrastructure player and has been one of the talking points of Broadband World Forum 2017. There’s nothing intrinsically wrong with G.fast, of course, but it has generally been viewed as a compromise move rather than going all-in on fibre-to-the-home.

“Bringing G.fast technology to the NBN access network in 2018 again shows our commitment to being at the cutting edge of emerging technologies,” said JB Rousselot, Chief Strategy Officer of NBN (pictured at BBWF 2017 above). “Adding G.fast to the toolkit for the FTTC and FTTB networks will allow us to deliver ultra-fast services faster and more cost effectively than if we had to deliver them on a full Fibre-to-the-Premises connection.

“Our FTTP and HFC end-users already have the technology to support Gigabit services and adding G.fast over FTTC provides the upgrade path for those end users to ultimately receive Gigabit speeds too.”

As we wrote previously the industry seems to have got the memo that banging on about FTTH the whole time isn’t very constructive. It remains the ideal fixed line technology but it just isn’t practical or economically viable in many cases – especially more remote locations. So the sensible approach is to be open to a mix of technologies and use the most appropriate one for the location.

NBN is a few years ahead of most infrastructure players in adopting that kind of pragmatic approach, according to Netcomm Wireless CTO Steve Collins, who we met at the show (pictured below) and whose company is one of NBN’s technology partners for this G.fast initiative. NBN is a public initiative and launched at the start of the decade with all sorts of lofty FTTH ambitions, but has since had to introduce other technologies as the sheer enormity of the task hit home.

Netcomm BBWF 2017

The other tech partners for this gig (excuse the pun) are Nokia and Adtran, who also have a conspicuous presence at the show. Nokia’s stand, in fact, seems to have been over-run the entire time and while Huawei is also here in force, Ericsson is conspicuous by its absence, but then again fixed-line isn’t really its thing.

We also caught up with Federico Guillén, President of Fixed Networks at Nokia. He has been stressing the mixed technology message at the event and said NBN’s approach is a great illustration of his point. He has been talking about ‘fibre to the most economical point’ for a while and you get a sense that he feels that’s finally paying off.

The NBN news has contributed to a general sense at this year’s show that we’ve moved on from stigmatising G.fast as a compromise technology. Yes, it allows infrastructure companies to further sweat their copper assets, but if end users are getting a good level of broadband performance – most importantly a guaranteed acceptable minimum – then what’s the problem? You can read further analysis of the NBN announcement at UBB2020.